Natural gas is superior fuel as compared with coal and other liquid fuels, as it is environment friendly, safer and cheaper fuel. It can be supplied through pipelines and hence, there is no need to store cylinders in kitchen and thus saves space. It is environment friendly fuel and its usage as domestic kitchen fuel, as fuel for transport sector as well as fuel for industries and commercial units can play a significant role in reducing carbon emission. It is 60% cheaper compared with petrol and around 45% cheaper when compared with Diesel.

Implementation Process

Around 96 cities and districts in different parts of the country were covered for development of CGD networks till September 2018. As per commitment made by various entities in 9th bidding round, around 2 crore PNG (Domestic) connections and 4600 CNG stations are expected to be installed across the country in next 8 years. Various pre-project activities for these GAs already have commenced and efforts are being made to commence the physical works at the site. To further boost expansion of PNG/CNG network in India, Petroleum and Natural Gas Regulatory Board (PNGRB) has launched 9th CGD bidding round in April, 2018 for 86 GAs covering 174 districts in 22 States/UTs.

Significance

The development of CGD networks across India is focused to increase availability of cleaner cooking fuel such as PNG and transportation fuel (CNG) to all the citizens of the country. Its expansion will benefit industrial and commercial units by ensuring the uninterrupted supply of natural gas. It will also expand the potential coverage of CGDs to about 50% of country’s population, spreading over 35% of the area.

Background

Currently, share of natural gas in India’s energy mix is just over 6% and aim is to reach 15% figure for mowing towards gas based economy, while world average is 24%. India aims to bring down its carbon emission level and number of initiatives have been taken in this direction such as BS VI fuel, bio-energy, LED bulbs, International Solar Alliance (ISA), Pradhan Mantri Ujjawala Yojana and providing clean piped gas supply to more cities.

India is also be enhancing LNG terminal capacity, renegotiating Indo-Qatar Gas deal and encouraging positive Indo-US engagement in this direction. It is not only focussing on increasing use and supply of gas, but also on producing gas through agro-wastes and other products and including same into CGD network. It has also increased its focus on promoting the usage of environment-friendly clean fuel, natural gas as fuel and feedstock across country to move towards gas based economy.

On June 4, 2018, India received first shipment of its so far cheapest Liquefied Natural Gas (LNG) from Russian supplier Gazprom. The LNG has been delivered at a price close to USD 7 per million British Thermal Unit (mmBtu). This price is around 1.5 USD cheaper from the LNG imported from Qatar, which is India’s oldest and largest supplier of LNG. This price is also 1-1.5 USD per mmBtu cheaper than the LNG sourced from Australia and United States.

India’s Natural Gas Production and Import

According to official data, India’s total natural gas production in 2017-18 was 32.64 billion cubic meter of which 22.01 BCM is offshore production while 10.63% is onshore production. The natural gas production in India has fallen in recent years as shown in below graphics:

However, at present, close to half of Natural Gas demand is fulfilled by imports. India’s natural gas import dependence in 2016-17 was close to 45%. At present, India is fourth largest importer of LNG.

Natural Gas is one of the key inputs for generation of power and manufacturing products in fertilizer and steel industries. The current government policy also pushes towards a gas-based economy by raising the share of environment friendly fuel in the energy basket to 15 per cent from current 6.2 per cent.

India’s Gas Deals

At present, Qatar is biggest supplier of Natural Gas to India. The recent shipment from Russia has come under a 20 year deal between India’s State-owned gas company GAIL India Ltd and Russian supplier Gazprom. A few weeks before India had also imported its first ever LNG cargo from US under a long-term import deal. The government policy is to expand the LNG import basket to meet any contingency due to geopolitical or economic reasons.